BILL ANALYSIS AB 2275 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2275 (Hayashi) As Amended August 17, 2010 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(May 10, 2010) |SENATE: |33-0 |(August 18, | | | | | | |2010) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: B.P. & C.P. SUMMARY : Prohibits contracts issued, amended, or renewed on or after January 1, 2011, between a health care service plan, a specialized health care service plan, or an insurer, and a dentist from requiring a dentist to accept a payment amount set by the plan or insurer for dental care services provided to an enrollee or insured that are not covered under the contract. Prohibits a provider from charging more for non-covered dental services than his or her usual and customary rate for those services. The Senate amendments delete the Assembly approved version of this bill and instead: 1)Prohibit a full service or specialized health plan or insurer, with respect to plan contracts and policies issued, amended, or renewed on or after January 1, 2011, that cover dental services, from requiring a dentist to accept an amount set by the plan or insurer as payment for non-covered dental care services provided to an enrollee or insured. 2)Prohibit providers from charging more for non-covered dental services under a plan contract or insurance policy than their usual and customary rate for those services. 3)Requires the evidence of coverage (EOC) and disclosure form, or combined EOC and disclosure form, with respect to plan contracts and policies issued, amended, or renewed on or after July 1, 2011, that cover dental services, to include the following statements: a) If a patient opts to receive non-covered dental services, a participating dental provider may charge his or her usual and customary rate for those services; AB 2275 Page 2 b) Prior to providing a patient with dental services that are not a covered benefit, the dentist should provide to the patient a treatment plan that includes each anticipated service to be provided and the estimated cost of each service; c) If the patient would like more information about dental coverage options, the patient may call member services at [insert appropriate telephone number], or his or her insurance broker; and, d) To fully understand his or her coverage, the patient may wish to carefully review this EOC document. 4)Define "covered services" to mean dental care services for which the plan or insurer is obligated to pay pursuant to an enrollee's plan contract or insured's policy or for which the plan or insurer would be obligated to pay pursuant to an enrollee's plan contract or insured's policy but for the application of contractual limitations, such as deductibles, copayments, coinsurance, waiting periods, annual or lifetime maximums, frequency limitations, or alternative benefit payments. EXISTING LAW : 1)Provides for the regulation of health plans and insurers by the Department of Managed Health Care (DMHC) and the California Department of Insurance (CDI), respectively. 2)Requires contracts between plans or insurers and providers to be fair and reasonable. 3)Requires plans and insurers to reimburse a claim for covered services within a specified period of time of receiving the claim. AS PASSED BY THE ASSEMBLY , this bill required annual state property inventory reports by the Department of General Services to be completed and updated by January 1 of each year. FISCAL EFFECT : According to the Senate Appropriations Committee, costs to CDI would be minor and absorbable and costs to DMHC would continue to be about $60,000 - $70,000 in fiscal year 2010-2011, but would likely be minor ongoing. AB 2275 Page 3 COMMENTS : Covered dental services often include preventive and diagnostic services, such as cleaning and routine dental exams; basic dental care and procedures, such as fillings and extractions; and major dental care, usually involving root canals and crowns. Generally, orthodontia, cosmetic services, and implants are excluded from benefits and are considered "non-covered dental services." Cost-sharing for dental benefits is structured similarly to general health benefits, with the amount of deductibles and cost-sharing depending on the type of service. Often basic dental care and procedures have lower deductibles and cost-sharing amounts, while major services, such as crowns and root canals have higher deductibles and out-of-pocket costs. Many dental plans have an annual cap for covered services, at which point the plan stops contributing to the cost of services until the next enrollment year. According to the author, this bill is intended to prohibit dental benefit plans regulated by DMHC and CDI from setting fees charged by dental practices for procedures that the dental plan does not cover in its scope of benefits. The author asserts that the policy of dental benefit plans capping fees for procedures they do not cover is an intrusion into the marketplace, and results in the plans dictating fees for services they have no financial stake in, and for which the plan bears no risk. Furthermore, the author and sponsor state that dentists are not given the opportunity to refuse provisions requiring dentists to adhere to discounted fees for procedures that a dental plan doesn't cover, but must accept them along with the entire contract if they want to participate in the plan's provider network. The author and sponsor maintain that the capping of fees for non-covered services is used as a marketing tool by plans and insurers with prospective subscribing groups, and has given an advantage to the larger dental benefit companies which have a larger market share and more negotiating power. The sponsor states that this bill seeks to level the playing field among all dental plans. This bill was substantially amended in the Senate and the Assembly-approved version of this bill was deleted. This bill, as amended in the Senate, is inconsistent with Assembly actions. Analysis Prepared by : Cassie Rafanan / HEALTH / (916) 319-2097 FN: 0006255